Pandemic restrictions will ease across NSW from Friday as the state reverts to the two square metre rule.
On Wednesday, Premier Gladys Berejiklian said they would also relax restrictions on mandatory mask wearing except for on public transport, Ubers and taxis - though it was still highly recommended in settings where people could not social distance.
"From Friday morning ... we will revert to the two square metre rule in NSW with the exception of gyms," Ms Berejiklian said.
She said hospitality venues, functions and events - both indoors and outdoors - would be able to welcome more patrons.
However, capacity limits of 300 remained for weddings and funerals, while bans on singing and dancing also remained in force.
"We want to mitigate the risk of what we call a superspreading event," Ms Berejiklian said.
"No dancing, no singing, no mingling. If you're having a drink at a bar do it sitting down ... if you're at a wedding don't dance."
It's hoped restrictions for these settings will relax in the future, but for now the government wants to "allow economy to bounce back as much as it can".
Destination Wollongong general manager Mark Sleigh welcomed the change and urged hospitality operators to continue working in a COVID-safe environment to ensure restrictions would not be reversed.
"Today's announcement ... has been extremely well received from an industry which has done it extremely tough over what should have been their busiest time of the year," Mr Sleigh said.
"A vibrant network of responsible hospitality venues is critical to maintaining an attractive and competitive visitor economy proposition as we continue to navigate the challenges of the pandemic."
Meantime, authorities believe the returned traveller residing in the Wollongong area who had tested positive for COVID-19 after leaving hotel quarantine picked up the virus before they entered Australia.
Chief Health Officer Dr Kerry Chant said they had ruled out the person's stay in hotel quarantine as the source of infection, though investigations were ongoing to determine when they contracted it.
There has been no transmission associated with this case to date, including among their close contacts, who have all tested negative.
NSW recorded no new locally acquired cases of COVID-19 in the 24 hours to 8pm Tuesday night, while four new cases were acquired overseas.
Both the premier and Dr Chant thanked the large numbers of people from the Illawarra community who came forward for testing, with a total of 18,885 tests reported to 8pm Tuesday night, compared with the previous day's total of 7,315.
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